Lending money with interest

[Kryptik]

So my brother has been wanting to buy a new guitar for a while (either $750 or $900 depending on his final decision). Right now he doesn't have money for it, but he wants it in time for his guitar recital... so I was thinking about lending him the money. I have no other things I have to pay for (good thing bout being a teenager, have no bills or anything)...

I was thinking of lending it to him with a 3% interest... and raising the interest if he hasn't payed the money back after a year. Do any of you have any suggestions? I don't have any real experience with money so that's why I'm turning to you guys. Is that a good deal for both of us or is there something that will improve it? I will also be able to have full access to his old guitar so I can start my long awaited dream of learning guitar.

[Erki]

Originally Posted by Kryptik

I will also be able to have full access to his old guitar so I can start my long awaited dream of learning guitar.

Isn't that a good enough deal for you?

Just give him the money and trust that he'll pay you back. Much more interesting if you don't know when or in what form. But that's me.

[silicon toad2000]

loans with terms and conditions are a business decision.
Never mix business and family.
Either give it to him with no strings and let him pay it back of his own volition or don't lend it to him.

[Dave Kaminski]

Do what you wish. I have borrowed money from family interest free and have loaned money at interest to family?

Is there bad blood from it? Yes.
Did I make money? Yes.
Did I do anything wrong? No.

If you lay it all on the line beforehand and let them know this IS a business transaction and WILL be treated as such, you can feel free to have no qualms.

Lending money at interest, by the way, is called Usury. Just to let you know, Jesus was documented as being WAY against this. If you're a Christian, I'd say avoid borrowing money or lending money at interest, for your own eternal benefit (if that's really what you believe.)

Would I lend money at interest to family again? Probably not. There's not enough reward for the drama involved.

Would I borrow from family again? Hell yes. The terms (0% interest and unlimited time to repay) are pretty damn good

[Still Growing]

Originally Posted by Kryptik

So my brother has been wanting to buy a new guitar for a while (either $750 or $900 depending on his final decision). Right now he doesn't have money for it, but he wants it in time for his guitar recital... so I was thinking about lending him the money. I have no other things I have to pay for (good thing bout being a teenager, have no bills or anything)...

I was thinking of lending it to him with a 3% interest... and raising the interest if he hasn't payed the money back after a year. Do any of you have any suggestions? I don't have any real experience with money so that's why I'm turning to you guys. Is that a good deal for both of us or is there something that will improve it? I will also be able to have full access to his old guitar so I can start my long awaited dream of learning guitar.

Don't do it.

[Arboretor]

3% of $900 is $27 per year. Do you need this money so badly that you would risk hard feelings for it?

[Tayrak]

Have you thought about helping him raise the money? I don't know how old the two of you are but you could offer to help him do whatever for neighbours, it's spring way perfect, and he could keep the money you guys make (up to the 900, if you make more spit it even) and ask if you could have the use of his old guitar in return. He should be thrilled with your help, salary x2 adds up quicker so he just may make it before his recital, and he just might offer you the guitar as yours.

So, your helping and getting something--even if it is just the use of the guitar, and genuinly helping your brother, plus, he's working for what he wants and not just getting a handout.

Tayrak